PEABODY — Councilors say a new measure meant to spur housing in commercial places such as the Northshore Mall and parts of Route 1 is in need of a fix.

A recently passed residential zoning overlay ordinance calls for at least 25% of new units built in these areas to be affordable.

But out of concern that the percentage might make housing projects uneconomical for developers, the City Council is considering lowering it.

"Fundamentally, if you don't make it reasonable for a developer, they are not going to develop," Councilor-at-Large Dave Gravel said.

Both Ward 5 Councilor Joel Saslaw and Ward 2 Councilor Peter McGinn submitted a motion to the council's Industrial and Community Development Committee to reduce the minimum number of affordable units to at least 20%, which is still 5 percentage points higher than the city's inclusionary zoning ordinance for affordable housing elsewhere in Peabody.

The committee voted 5-0 last week to send the proposal to the Planning Board for its recommendation.

On July 11, Community Development Director Curt Bellavance had come before the committee to explain the proposed change.

"Previously, I had come before the City Council and I sought 15% affordable housing," Bellavance said, "and it was modified or amended to the 25%. I was looking to do a compromise and get that to 20%."

Bellavance said the city's Community Development Department works to promote new housing in general.

"We always seek to increase that by more than the required 10% that the state tells us to do, so originally we were looking at 15%, that's where the number came from."

Height restrictions

The ordinance also limits building heights to three or four stories, depending on the size of the project. Bellavance would like to see that number go up to make it easier for a developer to build affordable housing. 

"Our theory is simple math," Bellavance said in an interview. "You need density to increase the affordable number."

While a change in height restrictions isn't on the table right now, Councilor-at-Large Anne Manning-Martin asked Bellavance at the meeting if the shorter buildings might mean lost opportunities for housing developments.

"Part of the formula to produce more affordable housing is cost. It's a math," Bellavance told the council. "It comes down to density, how many units can you fit. So, the idea was having taller buildings so you can fit more units in that. The higher the density, the more affordable units you could make."

When Manning-Martin pressed Bellavance on his opinion, he said, "My opinion is we could go six or seven stories, so I have no objection to height of a building. You just balance it out." 

The councilors, in their motion, had also sought a legal opinion from the city solicitor on whether a developer could try to renegotiate the affordable housing percentage and whether the ordinance could withstand legal challenge.

"I think we've got an opinion back from the solicitor that indicates that there is no authority granted in the zoning ordinance, that he sees, to negotiate those percentages," McGinn said at the committee meeting.

He added the city solicitor seemed uncomfortable predicting future legal outcomes. 

160 units to go 

Saslaw said the city is 160 units shy of the 10 percent minimum affordable housing threshold set by the state. Communities below the threshold face developments with comprehensive permits under state law Chapter 40B. These developments can skirt most zoning in exchange for a percentage of affordable housing. 

Saslaw noted a "friendly 40B" of 60 apartments is being proposed behind the Sonic Drive-In at 55 Newbury St. All those units would be counted toward the city's affordable housing stock, he said. Another proposal before the council would add 15 more units, among others.

Saslaw said he does not favor tall buildings scattered about the city, so the only adjustment the council could make is reducing the affordability requirement to 20%.

"I think it's a good number. I think it's the right number. I think it's a fair number, and I think it's a step in the right direction," he said.

Not everyone at the meeting in City Hall was on board with the reduction in the affordable housing requirement.

"As a Gateway community, I think it's really important that we acknowledge that we have a higher than average rate of people who face different socio-economic challenges than the average resident of Essex County or Massachusetts," said Lynn Street resident Jaclyn Corriveau, adding that such communities are defined by "unreached potential," including home ownership.

"By reducing those numbers, I think it's detrimental. I think there are other ways that the city can do this," Corriveau said. One way would be to eliminate permitting fees for affordable housing.

Beverly has taken advantage of a tax incentive to spur housing, she added.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @TannerSalemNews.